Ethanol Plant Expansion

Brazil has started building a second corn-based facility in its effort to increase fuel supplies.

A joint venture in Brazil cofounded by an Iowa-based agriculture company has started construction on its second corn-based ethanol plant in Mato Grosso, Image courtesy of Summit Agricultural Group

FS Bioenergia, a joint venture between Iowa-based Summit Agricultural Group and the Brazilian company Tapajós Participações, recently launched construction on its second corn-based ethanol plant in Sorriso, Brazil.

The total plant investment was announced at $267.5 million. It is expected to be completed in time to sell ethanol to market by February 2020. According to the company, its operations are benefiting from the country’s RenovaBio program that pays biofuels producers for reducing carbon emissions. The first phase of the construction includes a production capacity of about 70 million gallons per year using about 24.8 million bushels of corn.

A yet-to-be-announced second phase of construction is expected to double production capacity at the new plant, requiring an additional investment of more than $93 million.

“Our idea to anticipate construction with a first phase is to access the market early,” says FS Bioenergia chief executive officer Rafael Abud. “Building the entire project at one time would only take a longer time.”

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Once completed, the new ethanol plant in Mato Grosso will add production capacity to a state that already produces more biofuel than it consumes. The company reports it currently sells ethanol to the north region of Mato Grosso and is expected to sell new volumes to the underserved Pará.

“As this mill will start operating at an off-season corn season in Mato Grosso, FS Bioenergia is closing grain purchase contracts that will be harvested next winter and will be stocked until the unit begins operations,” the company reports.

Abud says the company’s goal is to help corn producers become more productive. Currently, Mato Grosso’s corn yield is around 100 sacks per hectare (2.5 acres). “The more technical ones already produce 150 sacks per hectare, but, the United States already produces near 200 sacks per hectare,” he says.

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To expand agriculture production, the company plans to reserve area on its land in Sorriso for experimental maize crops and demonstrations of new technologies.

The new plant also will depend on the supply of eucalyptus chip to fuel the cogeneration of energy that supplies the unit. The company is partnering with producers in the midwest of Mato Grosso to plant about 74,000 acres of eucalyptus, which will be able to supply its two plants in the state. So far, partnerships have been made to plant more than 12,300 acres, many of which have been planted.

In January 2018, FS Bioenergia announced plans to double capacity at its plant in Lucas do Rio Verde, Mato Grosso, from 60 million gallons to 140 million gallons. FS Bioenergia is expected to process more than 50 million bushels of corn and produce more than 14,000 tons of corn oil and 400,000 tons of feed rations for Brazil’s livestock industry as a result of the expansion.

The company says the expansion is possible because of increased corn production through double-cropping, as corn production has increased five times in Mato Grosso in the past decade. In addition, Brazil’s RenovaBio program calls for a doubling of the country’s use of renewable fuels by 2030.

Production at the plant launched just prior to the Brazilian government levying a 20% tariff on ethanol imports from the United States.

Summit Agricultural Group was founded by Bruce Rastetter, cofounder of Hawkeye Renewables. In a September 2014 interview with DTN/Progressive Farmer about the first Brazilian project, he said farmers in the region were looking to add value to their corn crop, and the market for dried distillers grains was growing as more cattle became part of the mix.

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